The Purpose and Goals of Basic Estate Planning
Everyone needs some sort of estate plan, even if it is a simple one. There are many issues that face individuals, families, small business owners that really need to be addressed through some sort of estate planning vehicle. Regardless of whether one feels these issues are worth addressing, it is always more economical to plan. Consider the following:
- Should you have any minor children upon your death, the decision of who will be the guardians will be made solely by a judge, without any required input from any other family member, no mater how close a relationship. Proper estate planning can put this decision back in your hands.
- Should you own any real estate with a fair market value of at least $100,000 (regardless of any outstanding debt on that real estate), or have other combined assets that total $100,000 or more, the distribution of your assets will only occur after the estate has gone through the legal probate process, which costs your family tens of thousands of dollars, and can take years to complete. Proper estate planning can avoid this.
- The California Probate Code has already chosen who your beneficiaries will be, and those beneficiaries will receive portions of your estate per the applicable code section, regardless of what your wishes are. Proper estate planning can allow you to make these decisions.
- Should you ever find yourself in a situation where you are unable to take care of yourself (injurious accident, severe Alzheimer's, etc.), your entire life is frozen until a court makes the determination that you are incompetent after a series of public hearings. And after that, the one who has the authority to manage your life, assets, and decisions is appointed by the court, and may be a stranger or someone you don’t want to have that authority. Proper estate planning can put this decision back in your hands.
- Any beneficiary that receives any portion of your estate can lose it before they receive it to creditors, lawsuits, etc. Your hard earned money could also go to fund a drug habit, promote a sustain a gambling addiction, or even disqualify someone from government assistance of student financial aid that they may be receiving. Proper estate planning can protect your assets.
- Families of clients that are subject to the estate tax (more often than one would suppose), are required to pay 50% of your assets above a certain amount to the IRS in cash within 9 months of the date of death. Proper estate planning can reduce, or in most cases, eliminate any estate tax exposure.